ULTI (Ultimate Software)

Investment Analysis Clubs Saul’s Investing Discussions
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New, proprietary Credit Suisse SaaS Unit Economics Index… Based on this new fundamental analysis, we believe that there are several SaaS names in our coverage that are currently trading at a discounted valuation, particularly ULTI.

Ultimate Software (ULTI) was actually recommended by MF Rule Breakers in May 2012 (almost five years ago). It’s a Rule Breaker orphan, with only 55 posts on the board in those five years. To me, that makes me suspect that they just threw out the recommendation and forgot about it. I did take a tiny position when it first came out, but didn’t stay in (I don’t remember why as I don’t keep my notes that long on stocks I’m no longer in).

At any rate, it was a good Rule Breaker recommendation, as it is up 139.8% since the recommendation, and the S&P is up 90.3%. The Russell 2000 is only up 77%. (I’ll go back and read the original recommendation, those 55 posts on the ULTI board, and Bert’s article too, and at least a couple of earnings reports). It’s a large-ish company with a market cap of $6 billion or so. Yahoo gives it a PE of 223 or so, but I don’t know what that means without looking at their actual earnings. It sounds like GAAP.

Thanks Matt,

Saul

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Fantastic growth story

http://invest.kleinnet.com/bmw1/stats16/ULTI.html

Denny Schlesinger
No position

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Since I said I was looking into ULTI I thought I should give you a follow-up. I decided to pass on it. It’s relatively slow growing with a very high PE. Compare to PAYC which does the same thing with smaller clients, but is growing EPS at close to 100% instead of 25%.

Also accusations of fraud and nepotism in short article that Bert mentioned (but didn’t take a stand on one way or the other). http://seekingalpha.com/article/4030154-newly-revealed-contr…
Its CEO and COO are brothers, and its CTO is the CEO’s son-in-law. And its Chief People Officer has an undisclosed relationship with the CEO (they hold property together and have business entities in common).

I see no reason to take funds away from one of my other positions to put it in this one.

Saul

10 Likes
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Thanks for doing that Saul! I was going to try to get around to it at some point, but you just saved me the trouble!

Matt
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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Its CEO and COO are brothers, and its CTO is the CEO’s son-in-law. And its Chief People Officer has an undisclosed relationship with the CEO (they hold property together and have business entities in common).

I’ve interviewed there. I believe the CEO and CPO are husband and wife - even closer than you eluded.

No position

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Invest wisely my friends

1 Like
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Its CEO and COO are brothers, and its CTO is the CEO’s son-in-law. And its Chief People Officer has an undisclosed relationship with the CEO (they hold property together and have business entities in common).

I’ve interviewed there. I believe the CEO and CPO are husband and wife - even closer than you eluded.

Yes, I’ve always been wary of nepotistic companies as it’s very doubtful that the best person for the job is a relative of others in the company. Especially when there are multiple instances, as is the case here.